Medicare report blow for Howard

Patients would pay more to see a doctor and only half of GP visits would be bulk-billed under the Howard Government's Medicare changes, a report has found.

The report, commissioned by the Senate Medicare inquiry, is another blow to the Government's chances of getting the changes through the upper house. Key independent Meg Lees ruled out backing the legislation without major changes.

However, the study, by three La Trobe University health economists, gave Labor's Medicare plan a tick, saying it could lift bulk-billing back up to 77 per cent and cut out-of-pocket costs to patients by a quarter.

The Government quickly dismissed the findings, attacking its lead authors, Professors Hal Swerissen and Stephen Duckett, as being biased towards Labor. Federal Health Minister Kay Patterson said they had made up their mind before doing the research.

"The assumptions of this report are false, particularly the assumption that doctors are motivated by money," she said.

The authors believe doctors want to lift their incomes by about 10 per cent, and would do this by cutting back on bulk-billing. This would take bulk-billing down to a "floor" rate of 50 per cent and raise the average out-of-pocket patient cost from $3.90 to $6.15, they concluded.

But health economist Elizabeth Savage, from the University of Technology, Sydney, questioned why doctors did not raise fees now if they wanted to earn more.

"(The report) does not have a very strong empirical analysis," she said. "It makes a set of assumptions and the conclusions... are driven by those assumptions. In reality, what will happen will depend on a lot of factors."

Guy Barnett, a Government senator on the inquiry, said the report was tainted because Professor Duckett had been publicly critical of the Government's package before.

However, Professor Duckett - who has worked as a health bureaucrat under both federal Labor and the Liberal Kennett government - said the report took "a conservative approach".

"I also value my integrity very highly," he said. "There is no evidence whatsoever of bias in this."

Professor Swerissen said the report should be judged on the strength of its analysis, not any "perceived political affiliations" of the authors.

The report concludes that the Government's package would produce a "small" rise of 3 to 6 per cent in rural and regional bulk-billing rates.

Opposition health spokeswoman Julia Gillard said: "The Howard Government has been pretending... that their Medicare plan would not put up doctors' fees. We now know this is a lie." Democrats health spokeswoman Lyn Allison said the report sent the Government "back to the drawing board".